Eighteen percent of prospective first-time home buyers said extending the $8,000 tax credit would be the primary influence on their decision to buy a home before the end of 2010, according to a new survey from Zillow. That would equate to 334,000 buyers from Dec. 1, 2009, to Nov. 30, 2010 – a likely time period for an extension, according to additional analysis.
Zillow queried adults who qualify as first-time home buyers, asking them if an extension of the tax credit would influence their plans to buy a home before the end of 2010. If the credit were extended, of those who intend to buy a home, 18% called the credit the ‘primary influence’ in their decision, 25% said it would be a ‘significant influence’ and 27% said the credit would have ‘some’ influence on any home buying decision. Thirty-one percent said it would have no influence on their decision.
Zillow's analysis of current market trends shows that, if the credit were to be extended, a total 1.86 million first-time homebuyers would purchase homes between Dec. 1, 2009, and Nov. 30, 2010. If all could take advantage of the full $8,000 tax credit, this could mean up to $14.86 billion in tax credits.
‘There's little doubt that the tax credit will boost demand at the margin, and that fact will make it easier to work down our current high inventory levels of existing homes on the market,’ says Zillow Chief Economist Stan Humphries. "For every five home buyers who receive the credit, four would have bought their home even without the credit.’